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Political turmoil and tax threats have accelerated investment flows to havens, asset managers say.\n<\/p>\n
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October 20, 2025 – 09:24\n<\/p>\n
\n Sarah White in Paris and Mercedes Ruehl in Zurich, The Financial Times <\/p>\n
French entrepreneurs and wealthy families nervous about political turmoil at home are investing record amounts in Luxembourg-based annuities and shifting other funds to perceived havens such as Switzerland. <\/p>\n
Wealth managers, bankers and lawyers said the flow of personal investments out of France had taken off since President Emmanuel Macron called snap parliamentary elections last June, splintering the National Assembly and leading to a succession of fragile governments as parties bicker over budget measures.<\/p>\n
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The moves have continued in 2025. Prime ministers have come and gone and the government now in place, under Macron ally S\u00e9bastien Lecornu, has turned to additional taxes on the highest earners in its struggle to plug a gaping budget deficit.<\/p>\n
\u201cThe majority of assets we handle are no longer in France but going to life insurance contracts in Luxembourg, it\u2019s really accelerating,\u201d said Guillaume Lucchini, founder of Paris-based wealth manager Scala Patrimoine, which counts professional sportspeople and entrepreneurs among its clients.<\/p>\n
The flows to Luxembourg had been \u201cnonstop\u201d during last year\u2019s election and have carried on, said Olivier Roum\u00e9lian, a tax lawyer working with insurers in the Grand Duchy, adding: \u201cBrokers barely have to do any marketing work to get clients.\u201d<\/p>\n
Lucchini said a \u201ccrazy\u201d amount of capital was also going to Switzerland, where his business has a branch.<\/p>\n
French clients\u2019 investments in Luxembourg-based life insurance \u2014 a popular, annuity-style savings product, which as in France comes with tax breaks if held for over eight years \u2014 rose more than 58 per cent in 2024 to \u20ac13.8bn, their highest ever level, data from the duchy\u2019s insurance watchdog showed.<\/p>\n
This year\u2019s figures are not yet available by nationality, but overall flows into life insurance in Luxembourg rose again in the first half, and financial advisers expected another vintage 12 months.<\/p>\n
\u201cLast June, enquiries linked to Luxembourg doubled. Since then, with every new bout of instability, the enquiries pick up,\u201d said Benjamin Le Maitre, co-founder of the Avant-Garde family office.<\/p>\n
He said that most of the new money he was managing was going to Luxembourg, while Switzerland\u2019s safe haven status was also a draw, with people investing in securities-holding accounts there.<\/p>\n
Such investments are just one side effect of the political turmoil in France. Some wealthy families have even moved abroad, though numbers are not known, in a trend similar to the UK after the Labour government abolished favourable tax treatment for so-called \u201cnon-domiciled\u201d residents.<\/p>\n
The Italian business centre of Milan has been a big beneficiary thanks to the country\u2019s welcoming tax regime, though Italy said this week it planned to increase the annual flat tax on the foreign income of wealthy individual who relocate there by 50 per cent to \u20ac300,000. Spain and Portugal have also been attracting rich foreigners.<\/p>\n
It is more common to move assets abroad as a precaution than to opt for self-exile, because that usually means restructuring businesses and convincing tax authorities that the person has really left the country, but both wealthy French and British people do sometimes decide to move to a more lightly taxed jurisdiction.<\/p>\n
\u201cA lot of French moved to Switzerland between 1980 to 2010 or so. But you saw a real slowdown when Macron was elected [in 2017] and people hoped things would be better. Now that is picking back up,\u201d said Philippe Kenel, a Swiss-based lawyer who specialises in tax, estate and wealth planning.<\/p>\n
The pro-business, centrist Macron came to power eight years ago and quickly eliminated a wealth tax, replacing it with a less onerous one on property.<\/p>\n
But the president\u2019s ability to adopt more business-friendly policies before the end of his last term in 2027 has been severely curtailed after his decision to hold snap parliamentary elections last year.<\/p>\n
The vote resulted in a hung parliament which has toppled several prime ministers, the most recent of whom depends on support from the Socialists. The leftwing party is calling for the implementation of a wealth tax.<\/p>\n
While Lecornu has for now resisted the idea of a sweeping tax targeting France\u2019s wealthiest, his government is looking to raise an extra \u20ac2.5 billion next year from new taxes on holding companies and one-off higher levies on 20,000 of France\u2019s highest earners.<\/p>\n
Kenel said he knew people either looking to move to Switzerland under a lump-sum tax arrangement for those not working, or with other arrangements for individuals who wanted to live and work there.<\/p>\n
\u201cFor many of them it is not a question of taxes \u2014 though many are worried about taxes \u2014 it is about stability that Switzerland offers,\u201d Kenel said.<\/p>\n
The shift of funds to Luxembourg could also be the prelude to the departure from France of more tax exiles. Having money in the Grand Duchy gives people no tax advantage per se, and French residents still have to declare in France the interest earned, but they are not subject to double taxation and can therefore park money outside France while they assess their options.<\/p>\n
\u201cPeople may not be ready to leave France today but it helps them move more easily later if they need to,\u201d said Sandrine Genet, co-founder of Carat Capital.<\/p>\n
The Luxembourg-based annuities have a high entry barrier, requiring investments of \u20ac250,000 or above.<\/p>\n
Having money there carried \u201cpsychological advantages\u201d even if there were no clear fiscal perks, added Le Maitre.<\/p>\n
Fears of what could happen next in France are fuelling the wealth management business, even though Lecornu has won a reprieve from the immediate threat of repeat elections.<\/p>\n
\u201cI had one wealthy [French] couple in their eighties tell me 18 months ago they were worried the Socialists were coming to power and wanted to put more money in Switzerland to be safe \u2014 maybe about 20 per cent of their assets,\u201d said one Swiss-based banker.<\/p>\n
\u201cThey came to me recently and said they want to put more in Switzerland because they are worried about the far right.\u201d<\/p>\n
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